Huawei Is Reportedly Planning To Sell Its Smartphone Business Unit

The Chinese tech company Huawei Technologies Ltd. is planning to sell its smartphone business unit Honor to Digital China Group for a deal worth USD 2.5 Billion, Reuters reported. Ming-Chi Kuo, a popular Apple analyst who works with KGI Securities said in a report that it would be Huawei if it sells its Honor unit as it can free the company from trade restrictions. However, there are reports which also claim that Huawei is committed to Honor.

Huawei’s plan to sell the smartphone business is to guard down the U.S sanctions and rather focus on high-end phones instead of selling budget-conscious phones to the youth. According to the two people familiar with the matter, Honor’s deal could include selling assets, R&D capabilities, and supply chain management business. The news of selling the business came after a blogger posted that Huawei is planning to divest its Honor business.

Digital China is already a major distributor of Honor mobile phone and has partnered with Huawei in cloud computing. However, it is not the only one in the race to acquire Huawei’s subsidiary. Major Chinese electronic makers such as TCL Technology and Xiaomi Corp are also the potential buyer of the Honor brand, Reuters reported. Huawei launched the Honor brand in 2011 and in no time it became a popular brand in the low-budget segment phones. It started to came impact in the Asia market with online sales like BBK Group’s Oppo, Vivo, and Realme.

Huawei’s Mobile Business Update

Semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly got the license to supply from the US government to supply chips to Huawei. However, this comes with restrictions. A report from PhoneArena says that TSMC can’t supply 5nm Kirin 9000 chips which are anticipated to be part of the Mate 40 family, Mate X2, and also found inside Huawei’s 5G network equipment.  However, a recent teaser conveys that Huawei is not dropping off the plans to start production of its Honor V40 series.

According to a report, Huawei is expected to launch its new flagship series called Mate 40 on October 20, 2020. Meanwhile, a Weibo user said that, along with the launch of Matte 40 series, it’s going to unveil Huawei Mate 30 Pro E. The report says that the latter phone is equipped with a 4,500 mAh battery and comes with 8GB and 12GB RAM variants.

5G Business In Despair

Huawei is currently finding it difficult to counter U.S. sanctions which are making it affecting its semiconductor business. “Since the U.S. sanctions last year, U.S. manufacturers of semiconductors are no longer allowed to supply us so our previous U.S. partners can no longer work with us. Since August it has become even more difficult,” Abraham Liu, Huwaei’s vice-president for Europe, told the Kurier paper.

Even though U.S. sanctions are making it difficult to do business, Huawei’s vice president for Europe says that it’s serving its European 5G clients. Liu says that the company currently serves 90 Million Huawei mobile users in Europe. However, the company is facing higher scrutiny and is persuading the European telcos to drop Huawei. Last week, Orange and Proximus has picked Nokia to build 5G networks in Belgium.